Nifty erases early gains to end flat

Erasing all of its early gains, Indian equity benchmark -- Nifty -- settled the volatile session on flat note with negative bias on Friday. The market made a firm start amid supportive global cues. Traders also reacted positively with GST Council finalizing tax rates of goods and services under the four-slab structure with essential items of daily use being kept in the lowest bracket of 5 percent. The outcome had largely benefited the fast-moving consumer goods sector after rates for products like hair oil, soaps and toothpaste were brought down to 18% from 22-24%. Investors also got some confidence with Union Minister Arjun Ram Meghwal’s statement that the decision to implement GST from this July 1 is one of the important economic reforms and would be a major milestone in the growth of the country. He also said that demonetisation had helped improve the GDP of the country despite apprehensions to the contrary from certain quarters, noting that the growth has gone up and would reach 10%. However, market took U-turn in late morning session and entered into red as traders opted to book profit at higher levels. Deepening political turmoil in Washington and the Brazilian political crisis, too dampened the market sentiments which led Nifty to end with slender losses.

Traders were seen piling up positions in FMCG, PSU and Banking stocks, while selling was witnessed in Media, IT and Auto stocks. The top gainers from the F&O segment were CESC, Motherson Sumi Systems and Suzlon Energy. On the other hand, the top losers were Cummins India, United Spirits and Ujjivan Financial Services. In the index option segment, maximum OI continues to be seen in the 9300-9700 calls and 8800-9500 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 4.09% and reached 11.30. The 50-share Nifty was down by 1.55 points or 0.02% to settle at 9,427.90.

Nifty May 2017 futures closed at 9445.75 on Friday at a premium of 17.85 points over spot closing of 9427.90, while Nifty June 2017 futures ended at 9450.65, at a premium of 22.75 points over spot closing. Nifty May futures saw a contraction of 0.93 million (mn) units, taking the total outstanding open interest (OI) to 19.10 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, State Bank of India May 2017 futures traded at a premium of 0.05 points at 309.00 compared with spot closing of 308.95. The numbers of contracts traded were 73,865.

Yes Bank May 2017 futures traded at a premium of 4.35 points at 1434.70 compared with spot closing of 1430.35. The numbers of contracts traded were 30,345.

Bank of Baroda May 2017 futures traded at a premium of 0.20 points at 189.05 compared with spot closing of 188.85. The numbers of contracts traded were 29,176.

ICICI Bank May 2017 futures traded at a premium of 0.20 points at 307.30 compared with spot closing of 307.10. The numbers of contracts traded were 21,009.

Tata Steel May 2017 futures traded at a premium of 2.05 points at 491.05 compared with spot closing of 489.00. The numbers of contracts traded were 19,566.

Among Nifty calls, 9500 SP from the May month expiry was the most active call with a contraction of 0.04 million open interests. Among Nifty puts, 9400 SP from the May month expiry was the most active put with an addition of 0.08 million open interests. The maximum OI outstanding for Calls was at 9500 SP (6.18 mn) and that for Puts was at 9300 SP (6.75 mn). The respective Support and Resistance levels of Nifty are: Resistance 9492.18--- Pivot Point 9441.47--- Support --- 9377.18.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for May month contract. The top five scrips with highest PCR on OI were Bharti Airtel (1.57), TVS Motor (1.43), CEAT (1.42), Kotak Bank (1.40) and Britannia Industries (1.23)

Among most active underlying, State Bank of India witnessed a contraction of 6.27 million units of Open Interest in the May month futures contract, followed by Tata Steel witnessing a contraction of 0.07 million units of Open Interest in the May  month contract, Yes Bank witnessed a contraction of 0.53 million units of Open Interest in the May month contract, ICICI Bank witnessed a contraction of 4.92 million units of Open Interest in the May  month future contract and Bank of Baroda witnessed a contraction of 4.55 million units of Open Interest in the May month future contract.